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The KPI for Production should be to service the evolving consumer demand.
In most companies, production is not the system constraint. If it is, we should work towards either debottlenecking it or shaping the consumer demand, so that the system constraint is placed in the market.
Production should, therefore, help in servicing the evolving consumer demand through agile principles of supply chain. Its KPI should be product availability and product freshness.
I am often told that agile production methodology would lead to efficiency loss and cost increase. These are nothing but symptoms of suboptimal production practices.
Efficiency loss and cost increase happen mainly on account of two reasons. The first one is high changeover times, nudging production people to take larger batches. It is a limitation that should be overcome through SMED (Single Minute Exchange of Dies), which is applicable to all production processes.
The second reason is start-up loss when a new product is taken on the line. It manifests as either poor quality or low production speed. These can be overcome through TPM (Total Productive Maintenance) practices.
Let’s not get carried away by our own limitations. Let’s improve our fundamental production capabilities of flexibility and quality through SMED and TPM. Production can then be synchronised better with the evolving demand patterns.